Pipelines, LNG plants linked to higher job forecast

Market access would create 20,000 extra positions, says report

The oil and gas services sector, which includes drilling rig workers, is expected to need up to 47,900 new workers by 2022, according to a report published Thursday.

Photograph by: Stuart Gradon

CALGARY — Solving the oil and gas industry’s market access woes would add 20,000 extra direct jobs over the next 10 years, according to a report by an industry group.

The annual forecast by the Calgary-based Petroleum Human Resources Council of Canada released Thursday estimates direct industry employment in 2012 was 195,200, up 10 per cent from 2009.

Under two industry activity scenarios, direct employment over the next decade will increase by either nine or 20 per cent, with employment levels reaching from 213,500 to as high as 233,900 by 2022.

“As many as 38,700 new positions may need to be filled or as few as 18,300,” summed up Cheryl Knight, executive director of the council.

The higher number assumes that some planned liquefied natural gas export terminals on the West Coast proceed, along with controversial oil pipeline expansions to Canada’s east and west coasts and through the United States.

The lower number assumes that the industry remains locked in North American markets, where it receives lower commodity prices and its growth pace is limited.

The council says labour shortages will likely persist over the next 10 years in either case but Knight said that doesn’t mean it supports slower growth.

“I don’t think the shortage of labour drives decisions important to the economy of Canada,” she said. “I think it’s the reverse ... if we can target on our needs, that spurs creativity, that spurs initiatives, that spurs investments that will ease the labour shortage.”

“If we’re not growing, we’re generally in trouble,” agreed Alex Ferguson, vice-president of policy and environment for the Canadian Association of Petroleum Producers, which provided research used in the report.

“Labour shortages are a management problem. Those don’t go away with a quick fix,” he added.

Market access has been blamed by Alberta Premier Alison Redford for discounts on Canadian oil — dubbed the “bitumen bubble” — that cost the provincial treasury $6 billion last fiscal year.

Financial analysts have said the lack of market access is taking at least $20 billion annually out of Canada’s economy.

The council’s report published Thursday is considerably more bullish on growth than one it published last spring which dared not forecast beyond 2015.

“Last year we had one, most likely, scenario that actually showed a decline in industry size; it was a very conservative scenario because of the uncertainty in the market,” Knight said.

“This year there’s more certainty about expansion but still there are a number of factors that aren’t assured.”

Last year’s report estimated direct jobs would fall to 181,000 by 2015.

Along with jobs created by growth, the industry will have to replace approximately three per cent of workers lost to annual turnover (more than 60,000 by 2022) and about 45,000 workers who are expected to retire.

That means it will actually need to find between 125,000 and 150,000 new workers by 2022, Knight said.

The oil and gas services sector, the drilling companies and other contractors, will have the greatest need for new workers, with 37,700 to 47,900 openings, the report says.

Oilsands will need 14,900 to 22,200 new employees, conventional exploration and production 6,850 to 10,700, and pipelines from 3,000 to 3,250.

Knight said the federal government’s recent decision to suspend the accelerated labour market opinion process, which sped up approvals to bring in temporary foreign workers, particularly adversely affects employers in the services sector who generally work on short-term contracts and can’t make long-term job projections.

However, she applauded moves to add more skilled trades qualifications to the federal immigration process.

Ferguson said the temporary foreign workers program is important to fill short-term gaps in the labour market.

The report said longer term solutions include hiring people from other provinces where unemployment rates are higher and finding workers in under-employed groups, such as Aboriginals, new graduates, youth and new Canadians.

The council estimates the oil and gas industry will support between 900,000 and one million jobs across Canada, with 20 per cent direct jobs, almost half in indirect industries like construction, manufacturing, transportation and warehousing, and the rest “induced” jobs driven by the spending and service needs of direct and indirect industry workers.

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